| COOS BAY, Ore., Sept 15
COOS BAY, Ore., Sept 15 When federal officials
arrived in this scenic but economically struggling port a few
weeks ago for hearings on a proposed liquefied natural gas
plant, some residents had a sense of deja vu: it was only six
years earlier, in the same auditorium, that they had already
discussed the pros and cons of an LNG plant.
But there was one big difference this time around: the 2006
plan was designed to bring gas in, while the current project
calls for shipping gas out.
This literal change in direction illustrates how quickly the
shale gas glut upended the U.S. energy balance, and how critical
ports in the Pacific Northwest could be to the country's
re-emergence as an energy exporter, drawn by Asian demand.
While Asian LNG prices may be four times current
U.S. prices, selling energy abroad is a controversial topic in
the United States - still by far the world's top consumer of
oil. Plus, building infrastructure to move gas, coal and maybe
even oil from the interior West to the coast is a huge
undertaking that clashes with the region's environmental ethic.
"It's newer here. People are not accustomed to it," said
Bill Vander Lyn of Williams Cos Inc, which would build
the associated pipeline to Coos Bay. "That's the difficulty."
Oregon is a very green place in more ways than one, with the
region boasting the densest forest cover in the country, and a
leftward bent to its politics.
Steered away from California by the cost of living,
progressives now flourish there alongside a growing movement for
locally grown food and renewable energy, despite the state's
long tradition of logging.
The overall $5.4 billion project, backed by Canada's Veresen
Inc, would include the first U.S. LNG export plant on
the West Coast, handling 1 billion cubic feet of gas a day -
equivalent to about 1.5 percent of U.S. daily consumption.
The Pacific Connector pipeline would run 230 miles (370
km)from the emerging gas hub of Malin, Oregon, on the California
border. It would traverse dense mountain forests that are home
to endangered species such as the Northern Spotted Owl to reach
a coastline known for its rugged beauty and abundant salmon.
Meanwhile, coal companies working in Wyoming and Montana are
eyeing exports via Washington and Oregon, at half a dozen sites
including Coos Bay, though one plan was recently dropped.
Canadian ports are considering coal export facilities as well.
Canada represents a backup plan for would-be coal exporters,
said CLSA analyst David Lipschitz, though he felt a U.S. Pacific
Northwest project would get built eventually, even if it took
five years. "It seems like it's always two years away," he said.
The cost for all the proposed coal projects is in the range
of $1.5 billion, based on numbers from the companies planning to
fund construction of the coal loading facilities at the ports.
As with their coal mining counterparts, U.S. gas producers
also want to secure profitable prices for their output, via LNG
projects like the one in Coos Bay, known as Jordan Cove.
Williams will fund $900 million for the pipeline and Veresen
is seeking partners to help fund the balance, such as Asian LNG
buyers or gas producers. The plans prompted four public meetings
hosted by the Federal Energy Regulatory Commission, the lead
agency on the required Environmental Impact Statement (EIS).
"HOPE WE DON'T DO IT AGAIN"
When Coos County resident Holly Stamper shuffled up to a
microphone at the first meeting on Aug. 27, she carried the
weighty EIS for the now-defunct import plan, which explained in
its 1,123 pages why the United States needed more natural gas.
"Those arguments now become arguments against the project
for exporting our gas," she said, before telling the officials:
"Welcome back to Coos Bay. I hope we don't do it again."
Jordan Cove's capacity is half that of Cheniere's $5
billion Sabine Pass LNG export plant in Louisiana, which was
approved in April ahead of a 2015 startup that analysts said
alone would do little to lift gas prices.
Coos Bay would welcome about 90 LNG ships every year. Jan
Dilley of nearby North Bend found the idea of exporting energy
jarring in light of the planned Keystone XL pipeline from
Canada. "Even our presidential debate now is we're too dependent
on foreign oil," she told the meeting of about 80 people.
Nine of the 31 speakers supported LNG exports as a boost to
the area, where median incomes are only three-quarters of the
state level and unemployment is running at 11 percent. "There's
no work here unless you want to flip burgers, or some other
minimum wage job," said Adam Foxworthy, an electrician by trade.
Only three among two dozen written statements submitted to
FERC favored the project. Many worry about an LNG plant across
the bay from an airport in an area threatened by quakes and
tsunamis, to which Coos Bay resident Shannon Coates replied:
"Nothing is earthquake proof or asteroid proof or volcano proof.
The chances are there for a natural disaster, but it's a chance
I think we have to take for the economic benefits."
Vander Lyn, an environmental adviser, said FERC approval -
which could take a year or more - was clearly a significant step
for the pipeline, though various agencies from U.S. Fish and
Wildlife to Oregon Coastal Zone managers would still have a say.
COAL'S COOS BAY COMEBACK
While Coos Bay is associated with wood products, having been
the world's largest lumber shipment port until the 1970s, signs
on its waterfront tell of its history with energy: Euro-American
settlers were drawn there in the 19th century to mine coal.
The Oregon coal may now be gone, but six sites for exporting
inland coal -- including Coos Bay -- had been under study in the
Pacific Northwest before one was scrapped last month at Grays
Harbor, Washington, when another export type was deemed better.
"One down, five to go," said Laura Stevens, regional
organizer for the Sierra Club's Beyond Coal campaign.
As for the Coos Bay coal project, backed by Japan's Mitsui
, it could export 10 million tons a year in a decade.
Environmentalists and politicians want an area-wide EIS from
the Army Corps of Engineers that would cover all coal exports
from the region, and 100 people recently staged a protest at the
their regional headquarters in Portland to demand it.
The Army Corps said there was no timetable for a decision on
whether to do an area-wide EIS, but each single project would
remain on their regulatory courses. The coal project where it is
closest to a decision is in Bellingham, Washington.
Australia's Ambre Energy, which flirted with an initial
public offering of shares in Australia this year, is behind two
other coal projects on opposite sides of the Columbia River.
One is Longview, Washington, where coal would be moved off
trains to ships, and the other is St. Helens, Oregon. Starting
in 2014, Ambre would load coal up river on to barges and only
transfer it to Asia-bound ships at St. Helens, a historic but
modest town 30 miles outside the hip urban bustle of Portland.
Earl Fisher, a county commissioner, says there is limited
local opposition to that proposal. More controversial is Kinder
Morgan's plan to rail it to St. Helens, leaving little
room on the tracks for much else, he said. Yet there was always
a risk a rival port deal could clog the rails anyway. "Then we
would just wave at the trains as they go by," Fisher said.
For many, however, the logistics of exporting energy sources
are beside the point in a country that has had to import large
amounts of oil for half a century. "The American people want
energy independence," North Bend resident J.C. Williams told the
meeting on Jordan Cove. "This will defeat that goal."